Bigtime Web 2.0 angel investor Reid Hoffman adjusts how he invests
GigaOm has a noteworthy piece about Reid Hoffman, chief executive of LinkedIn, and how he almost decided to sit out of investing in the crowded media space, but the decided to invest anyway — but only after adjusting his strategy.
Hoffman was in from the beginning of the fad, and has been known to speedily round up $250,000 seed rounds from among his friends for projects he likes. Obviously, with LinkedIn, he might be using his Web 2.0 contact tools to do this 
The investor in Digg, Facebook, Flickr, Friendster, Ironport Systems, Last.fm, Nanosolar, Ning, Six Apart, Socialtext, Tagged, Technorati, Tiny Pictures, Wikia, and more, said his requirements are as follows:
First, customer acquisition: data, or a really good plan, on how to get to the first million users, then a good growth rate thereafter. Second: good pricing power and margins, for economics. Third: an ability to protect the business once you’ve created it through innovation.
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
